overboard here. he's looking for pull back. >> overbought. thanks, gary. great to have you down here as always. that does it for us at "squawk on the street." let's go to fast money halftime. today we tackle one of the biggest issues facing or investigators. we look at the problems and come up with solutions with some of the biggest players in the many more join us for a wide ranging debate. is high frequency trading good or bad for investors and what kind of regulations help restore your confidence. david einhorn making news today

in new york city. kate kelly is following that. >> he went through four big ideas, some of which was the short bed on green mountain coffee roasters. he said they're playing out like he expected there and some developments happen faster than he expected. he essentially thinks there's a high likelihood of improper accounting here, but at a minimum waistfsteful spending. his most surprising call, and i talked to him for a little bit after the presentation and he agreed this may have been the most counterintuitive was his long bet on cigna. he said hmos are undervalued right now. people are afraid of them because of obama care, among other things, so they don't want to talk about them. the whole group is trading at a discount. if you actually go through it, cigna is just -- i'm laughing because he just walked by me on the street actually.

anyway, cigna is actually better positioned than other stocks. the he cexposure to obama care small so it's well-positioned. i asked him about lulu lemon. he said, listen, focus on what i said at the beginning of the remarks, which is to say the rumors about stock picking goes to the ridiculous. he's amused by the idea that he's a verb, a stock can be einhorned if he comments on it. he said many times there's nothing there, scott. a lot of fact and fiction at times. >> yeah, kate. the mere fact that einhorn is speaking to you is news in and of itself. the man doesn't speak for the media all that often. he does these presentations, but he so often does not stop to speak to folks like you about his picks, right? >> that's right. he does appear to be battening down the hatches more so, scott,

than what he normally does because of the rumor effect that drove him crazy. he make jokes about when he clears his throat the stock starts to move during the confidences. i did buttonhole him and of the four ideas he shared what was the most surprising? we talked about cigna, and then we talked about lulu briefly. i think people were expecting to perhaps hear some color on herbalife, but he warned everyone at the beginning of the presentation he wasn't going there. for what it's worth chipotle is another stock he talked about. he thinks they're overvalued and facing competitive pressure from taco bell. he was asked during the q and a what he thought about yum brands, and he said because of issues in other businesses, he's neither long or short. he's on the sidelines there. >> kate, thanks so much. kate kelly out of the value investing conference breaking news on david einhorn. he said i'm not here to talk about herbalife and the stock spikes because the biggest fear in some circles is he will short

herbalif t rumor was in the market before and the stock will crater as a result. he doesn't speak about it. that's what the chart looks by. >> when he did the drive-by, everyone assumed he was short. why be in the conference call? hedge fund managers and long only managers do all the work. he's also got a good sense of humor, so he's probably just tweaking some people. let's talk about cigna for a second. one of the things he mentioned, he got involved in the managed care stocks a few months ago. i own wellpoint and ambac in it and i sold it after the ceo resigned. that's a compelling space, particularly as the individual has to buy health care insurance. wellpoint is well-represented. cigna is another one. if you look at value, very, very low valuations. >> i want to go one more. josh brown, give me the read on that. einhorn says short it. what do you say? >> i was at the conference, and there was a gasp. there were rumors that this

would possibly be an einhorn target. it came to fruition. the south side doesn't understand chipotle's customer. they think they go to starbucks and panera and einhorn said that taco bell is the big threat. they launched a catina bell, so that was interesting to me. i thought the gm long idea was interesting. he thinks they can earn as much as $6 post taxes in earning per share by 2014, which would make this stock very cheap if he's right. >> moral of the story, einhorn speaks and stock moves. let's move on. what is the u.s. government doing to restore confidence? they're hosting a roundtable to discuss technology and training. we are joined live from washington, d.c. with more on that. aman. >> it's a day-long roundtable ongoing right now.

they're hearing from a variety of industry experts from exchanges and from players who are buying and selling stocks. the message that they get from some of these computer experts is that there is no such thing as absolutely perfect software that doesn't have any errors in it. that is a scary message for people who got millions of dollars on the line with some of these software programs that are trading at such high frequency in the market these days. they also heard a variety of reform pro p pofls including this idea from lou pastina from the new york stock exchange. >> we believe a kill switch could be designed at the exchange level that would halt quoting and trading activity of a broker dealer if it exceeded the established peak net notion of value threshold set by the broker dealer. >> another issue that mary shapiro wants this group to focus on during the day's discussions and possible reforms is latent see of information getting to the average investors and the information getting to high speed investors paying for high speed data feeds.

there's a lotted on the table here. whether it leads to new regulation is the big question at the end of day tonight, guys. >> thanks so much. mark cuban knows how wall street works. in the height of the dot com boom, he launched several companies, one of which went public and was lasht sold to yahoo! for $6 billion. told cuban says wall street's original purpose has been destroyed by high frequency traders. mark joins us now. welcome to halftime. great to have you on the show. >> great to be here. >> how much confidence do you have in the markets as you sit there today? >> well, you know what? they just said in the report, he said it best. there is no such thing as bug-free software, which was my premise and problem with electronic agco rhythmally driven trading. you can't fix the mistakes because you don't know where they are. the idea of a kill switch is ridiculous. by the time you hit a kill switch, it's too late.

it's really just the nyse protecting their own, cya on their part. they're the root of the problem despite the fact people don't want to admit it. they're a for-profit entity now, and they're doing what every for-profit entity does. they try to increase their sales and take care of the best customers. to do that they create all the different order types. how many order types do you need? in the case of the nyse and other exchanges, they create as many as they can to get more algorithmic trades to pay for the volume. the root of the problem is what's going on at exchanges, and all the algorithmally trading is a symptom of all that. >> the problem is the genie is out of the bottle, as you know better than most. technology can go awry in any form or fashion, some of the businesses that you've formed and then sold run on technology

and sophisticated technology at that. what's the solution? >> well, the solution is you've got to dial it down. i mean, look, there's two options. one, you just let it continue and you just try to pare it at the edges and do things like a kill switch that solves nothing until you already have a problem. you say, what you know? we're done. you know, there is going to be no more investor confidence. the third is, you actually, you know, go back and change the rules and you try to make these exchanges nonprofit again. i agree with you, i don't know how do you it. if we don't do something that is significant and goes to the core of the problem, it's never going to change. investor confidence is going to be lost, and worse yet you have huge, huge problems like we've had in the past. >> so you worry that another flash crash-like event, another knight capital, another facebook ipo debacle, another bats ipo debacle and so many other market

events that shook investor confidence can happen again? >> i don't worry about those things. i worry they can a whole lot worse. there's no such thing as bug-free software. when you have algorithms trying to outbattle other algorithms to get a trading edge, there's no way to know what the results could be. the concept that you just put in, a kill switch, shoot, there are more trades that happen in the blink of an eye than a kill switch can ever cure. that's just the reality of technology, and they're fighting to make, you know, trades even faster. it's crazy. >> let's bring in traders, guys who make a living trying to maneuver these markets every day. john, you're one of them. you would agree with bha mark cuban said? >> virtually every word in fact. a decent analogy is united airlines, american airlines and delta, they're regulated by the faa and others, and these guys

have, of course, a responsibility for safety of the passengers that they fly as well as, of course, the appreciation of the flying experience, which could be a lot better. we all know that, but there have been a lot of cutting back on the edges, and it's not as luxurious and you have to go through security clearance and all the rest. at least they're trying to make it safer. with high-frequency trading in the game, the s.e.c., mary shapiro has turned her back on the regular investors like yourself. they're complaining saying it's a rigged game that makes no sense, and shouldn't the regulator do the same thing the faa does for the airlines? >> no question. i mean, you've got to break it down, though, so you don't give all the traders a comeback. there's no problem with electronic trading. there's huge advantages in improvements because of electronic trading. set that aside. >> i agree. >> the second argument is about liquidity. there's a huge difference

between volume and liquidity. volume is just volume. liquidity is there when you need it. there's nobody in hft holding positions, and second to that, there are no equities -- no high frequency traders are going into any type of equity or any type of security that doesn't already have volume. so it doesn't really add volume or liquidity where it's needed. it goes where the volume already is, and it doesn't stay there when you need it as liquidity. third, they talk about reducing costs for the individual investor. a, that's a result more of electronic trading than high frequency or algorithmic trading. b, if you look at all the risks associated with it, if you truly want to hedge the risks, it's going to cost you a lot more than any savings you could have gained and even worse, if you look at how much that savings truly is to the individual investor, what's it amount to, 75 cents a month? we're risking the whole market

over, you know -- i'm not pulling that number. that's not an exact number, but we're risking the entire market over that. it doesn't make any sense. >> your point is well-taken. you're going to stick around. we're going to take a quick break. we reached out to all of the major exchanges hoping they would participate in this discussion that we're having today. in fact, the new york stock exchange, nasdaq, direct edge and the toronto stock exchange all declined or request to come on the program today. mark cuban will stick around. when our summit continues, is rage against the machines justified? we'll debate that question with the ceo of a high-frequency trading firm. later, when he talks the markets listen. cooperman sounds off on high-speed trading. we'll be right back.

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welcome back. at market flash desk we're watching the telecom wears. deutsch telecom says it's near a stock for stock deal with met fro pcs here. that's causing weakness as you can see in shares of sprint next tell. sprint was close to a deal with metro pcs as recently as this spring, but what they were talking about, guys, was a stock for stock deal, and that was when sprint shares were in the $2 range. you don't want to issue stock at this level. the big question is will sprint battle nem? it looks like they don't have the prowess at this point at the $5 level to do it. that's the big question. the market metro pcs is having a great day. >> sprint has had a great, great run. >> that's the trade. so a couple things. great downgrade by raymond james, number one. let price be your guide.

september 19th it traded up to 5 3/4 give or take. it traded lower. today you have similar if not more volume. we've already traded close to 100 million shares in sprint. i think the trade sits up really easily on the long side. it will wind up being today's low as your baseline and traded for the long side for there. this story is far from over, and i think sprint is pretty -- >> look at leap wireless as well for the cricket brand and so forth. as soon as it started to move t-opened at 7.02 this morning, and it exp ploeded up to $8. it's a fantastic ride, in and out, no position any longer in leap. >> nice pointing that out with a move of 13% for leap wireless. let's hear from the other side of the issue. what do high-frequency traders think about the way the market is functioning today? sean is co-founder and ceo of

t-3 trading group which specializes in high frequency and automated trading. high-frequency trade sg a good thing? >> there are good eggs and bad eggs. >> you had to think about that for a second. >> there's good eggs and bad eggs. if the regulators do the right thing and keep things like reagan ms out of the marketplace and repeal certain rules and the exchanges such as batt, edge can do a better job controlling their malfunctions, i think we would be -- investor confidence would be much better. >> you mentioned a term regular nms. most have no idea what that means. does that say that you have to execute a trade at the lowest price, wanot the fastest sfeepe? >> it's a protection rule that means when i put an order in at

$20 and there's a guy at 19.350 the 100 shares at $20 has to be hit first. that bid has to be hit first. what's happening right now in the space is that the guys that are below that $20 are removing their liquidity after that $20 is getting hit on the bid. to me, if that is removed and you don't center to do thhave t not hit through the market. >> tell me the virtues of high frequency trading. you hear the same argument every single time. we lowered the prices for everybody else trading stocks. mark cuban has a different take on that. mark is standing by still. >> what are the virtues of it? >> to get the confidence back, the general investing community has to understand what the problem is. the problem is not high-frequency traders. the problem are regulators, regulations, exchanges like i've mentioned as well as different risk management and compliance

tools to help control what goes wrong in the high frequency space. >> you tell me that high frequency traders are a by of book market participants like everybody else? what about the issue of quote stuffing or the issue of jumping aahead in the q or the exchanges themselves allowing high frequency traders advantages that the little guy sitting at home watching you on television today does not have? >> let's understand two things. there's two types of high frequency traders. guys that post liquidity to the marketplace and guys like what i do is take liquidity. the guys that post liquidity, one stat i look through is understanding over 98% of quotes on the bid and offer are not real. you're correct. the guys posting liquidity in the marketplace should not be -- should have rules against them to not be allowed to post that kind of liquidity. >> i've never heard that position before, that zapping

liquidity from the market is a good thing. those are the bad guys. when you take liquidity out of the market, you create volatility in the market by combination. it's not a good thing. my issue with hft sbt the fact i have other capitalists out there making money. they're no different than some clown trading green mountain coffee because david einhorn gets up and says you're shower. he's slower and dumber than the hfds. they can't possibly safeguard the technology enough to prevent a market meltdown again. that's my argument. i want to ask, how much do you spend on technology each year? >> we spend a lot of money on technology. we co-locate. >> how much is a lot? what do you sfend? >> spend different amounts depending on where we're going and depending on what we're buying. >> i assume that spending is to create more alpha for you, more gains rather than to create more safeguards for the general market. you can't possibly in a firm of

your size spend enough to safeguard the market? >> we spent a lot of money on compliance and risk controls. >> scott, you know no matter how much money you spend, it's like any software program in any application, not just hee-frequency trading. there's no such thing as bug-free software, and when you transact in milli seconds by the time your compliance people or order distribution or anything you're doing, it's too late. the cat's already out of the bag in terms of trade. >> look, mark, i 100% agree. one thingle i will tell you is there's definitely bugs in it these programs and we all understand. the programs are not in the high-frequency traders. we're missing the boat here. it's on the exchanges. it's the regulatorregulators. >> scott, you say protect me from myself. set the rules, and you'll play by whatever the rules are. i said at the beginning is the big problem is the exchanges are for praft.

they have to create all kinds of order types to keep you engaged. how important is it keeping up with all the different types of order types coming from the exchanges, and how involved are you with shaping the type of order types or functions that are available to your algorithms on a daily or weekly basis? >> sean. >> look, all those different order types, we do use them, okay? why are the exchanges and regulators giving -- >> skocott, get back to it. you can't say it's not my fault and put it on them. what type of order types are important right now? what are you using right now in the latest algorithms? >> there are different order types that direct edge uses. iso orders, different orders to avoid the regulations that are already in place. the regulators in terms of regular mns-611 is causing this issue. >> what's important here, guys, regard lgs of -- >> are you using the order types to avoid the regulations?

i might have misheard you. >> there are different order types people use. some order types are given to the high frequency traders in order to do those kinds of things. that's an issue because what that actually forces us to do is not trade the right way. if there's a quote behind -- >> thank you very much. you just hit the nail on the head right there. >> if there's an order behind the inside bid right now, we cannot get that order. nobody can. the flash crash is not caused by high frequency traders. it was caused by faulty bugs in systems, which i agree with it. >> so what you're saying, someone put the drugs on the table, and you couldn't help yourself, which is fine, because that's just the way the business works. but here's the bigger question. name me one individual trader that has access to those order types? >> everybody does. i don't know what you're talking about. go to the new york stock exchange, nasdaq, anywhere. >> if i wanted to trade using

those order types, they're not easily available -- let me rephrase it. >> they are easily available. go to nyse.com. >> they're not available to me. i can't go into the new york stock exchange and say i want to write some software. >> you're completely wrong. they are. go to nasdaqtrader.com and you can purchase them from the exchanges. >> what's not available is for the individual investor to make themselves available as a drekd customer and use their technology, which they play p place closer to big computers to they can get an advantage of price. >> let's do this. sean, before i let you go, i want this it program to be about solutions and not just blame. what is the answer? surely it can't fall on the regulators or on the exchanges. is it time for the high frequency trading industry to look in the mirror itself and

notice what happened with knight and realize it's time to change? maybe it's time to slow things down? >> i fully agree. there's one thing i have said for a long time, which is a cancellation tax. there are a lot of high-frequency traders posting bids, a lot of bids and offers that are not real. it's not the real, true bid and offer. you see it today with mini flash crashes all the time. there isn't liquidity there. mark is correctment it's because of reagan ms as well as high frequency traders putting up bids and offers that aren't real. there should be a cancellation tax. if a trader cancels 80% of the time, he should be shen sured. over 95% of the time, they should be fined and banned from trading. >> thank you so much. mark cuban will stick around. we'll take a quick brake. man versus man. we turn to a major name in the hedge fund industry. while leon cooperman believes

it's turning the market into a casino. can the gold rush continue through the fourth quarter? we'll get some answers when we come back. want to try to crack it? yeah, that's the way to do it!

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welcome back. we'll check on the s&p 500 here. looking at modest loses, a point and a half. we have a choppy morning, but basically at the flat line. want to know the secret to beat the market? get into gold, and it helped his flagship fund top it last quarter. will that trade continue to work? jackie is the host of a new online show on cnbc.com called "futures now." >> that's exactly right, scott. you talk futures every day on halftime. now we have an online live streaming show dedicating to trading them. it's been better than gold lately, the gold stocks? since the beginning of july gold stocks have doubled the performance of gold. the question raging in the pits, what's the better gold or gold stocks. we'll get some answers with the

crew. anthony, let's start with you. which are you buying? >> i'm buying gold, and i'll tell you why. traders are talking about a report that came out a week ago from money managers, and this report was what's the biggest threat facing the market? the money managers came up with it wasn't iran or iraq or wasn't europe. it was the fiscal cliff. my scenario is going forward, if that's the biggest threat as we get closer to the end of year, you don't see a deal in the fiscal cliff. you see people take money out of the equity market and put it in gold. the gold stock should do okay in the scenario, but i think the gold futures will do better at that point. >> anthony, let me jump in on that. there's going to be a devergence between the gold miners and futures or physical gold. if you look at the history of the gold, you remember the days when the stock market was up and gold was down and vice versa? i think we're going to disconnect because right now we are gold up, stocks up. so we get a divergence and you

see gold perform well in that environment closer to the physical cliff you were talking about and ear regairregardless the dollar does. guys aren't getting out of positions in gold. you have a great support level at 1530, 1630, and now in the 17s. i don't think this is a top but a consolidation period. right now there's a couple -- >> i see where you stand. break it down and give us the trade. >> listen, everybody wants to short the market up here short term. i'm fading that and taking the other side of that. big money support as i laid it out. i'm buying gold on a dip today, 1769, with a 20-point stop at 1749. i'm looking for a profit at 1809. so i'm risking a couple of grand to make four. i like this it trade. >> rich, i like the trade itself, but i think you get in at a better level at the 1750 area to get in and buy gold. it goes above 1800. i want to get there.

>> so you heard it straight from the pits. they like the pure play in gold, and now you know how they make money on it from the pits. what about you viewers? where do you see gold heading by year end. logon and vote in the poll. we'll reveal the results in a first ever live streaming show at 1:00 p.m. eastern at "futures now." we have a special guess today, the boss at jetblue. he's tell us where he sees oil going next. in the meenl time, scotty, do you have a question for the traders? >> what do you make of the fact miners have outperformed gold itself in the last three months obviously after a severe underperformance? >> this is a short-term pop and they're playing catch upand exceeding the gold. you stee that relationship turn around a bit as the broader market sells off a bit. i want to have gold here. >> i got you. you can see more of jackie and the gang 1:00 p.m. eastern on

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has wall street turned into a giant casino and what can be done to return wall street to its original purpose? leon cooperman wrote an op-ed in the financial times last month along with themist trader joe salusi. mark cuban is still with us. mr. cooperman, why did you feel a need to pen an op-ed about this topic right now?

>> i guess to quote there's an old-timer who headed up the office of mgts and budget by the name of burt lance and he coined the if it ain't broke, don't fix it. if it's broke, fix it. how much incidents does the s.e.c. have to say, they couldn't open their own offering, facebook, 70% of daily volume has nothing to do with research and the slicing and dicing. it has driven the public out of the market and raised the cost of capital to business. the s.e.c. has been very big on competitive markets, narrowing spreads. it's in the s.e.c. and public's interest that the brokerage community have recent property or they'll withdraw from the business and stop providing services. i think the s.e.c. should step forth. the uptick rule was instituted in the '30s as a result of the abuses coming out of the great depression. it serves the markets well for i

don't know 70-odd years. we had the problems arise subsequent to removal of the uptick rule. the first step as a trial would be to reinstate the uptick rule and incapacitate the high frequency traders and see what happens to the market as a result of this, the market mechanism. that's my view, don't fix it. >> i don't get the whole hft thing, but i'm not appear plektic as the people on the panel. investment confidence has been ruined by jon corzine, bernie madoff, the list goes on and on. is the individual investor hurt by hft? they're trading for tenths of a cents. he's not trying to -- by how much, sir? >> how much? why should they be able to run the public out? >> how hurt are they being?

that's my point. >> how hurt? why is should they be hurt at all or abused? >> we're talking about tenths of cents and hundredths the cents. >> why not get the individual investors to write them a check? >> that's crazy. >> ichl an apologist for hft at all. i think there are other ills out there, and nobody convinced me, by the way, that it was hft that caused the flash crash candidly. nobody identified what happened, and the knight stuff was more -- >> that's so not true. that's so not true. a great resource is nanax.net. they go into enormous detail about the flash crash from 2010, but all the mini flash crashes that happen every single day. it's not like this is just hypothetical. it happens, and it's out there every day. there's no value. look, you have to ask yourself, what is the purpose of wall street? its original purpose was too

create capital for companies to grow. what we've seen over the last 20-plus years is that the number of companies coming public has dropped dramatically. if you want to talk about correlations, look at the correlation between the drop in the nobody ipos, 60 million and others and unemployment. as the number of ipos in that range goes down, unemployment goes up. that's because you can't come to wall street anymore like uktd in the '80s and '90s and have an ipo raise money and grow your company. there's a lot of different reasons for it, but a lot is with algorithmic trading and everybody is looking for a tenth of a cent and they're doing it a million times a second and trying to add it up. there is no value to hft, period, end of story. >> mark, it's joe. you're right on, and you've been right on the entire time. lee is a long-term investor, and this is what people are missing in the argument. when a long-term investor has a conflict, the s.e.c.'s mandate

is always to side with the lodge-term investor to facilitate capital formulation like mark is talking about. that's what the s.e.c. is supposed to be doing? >> supposed to be doing and doing are two different things. i have the testimony from mary shapiro or at least the commentary she's giving on chill today. in it she says after the flash crash, the agency -- heez are her words -- were well-positioned to respond. baloney or what? >> it tooks five months to create a report. there's no way to reconstruct the events of may 6th, and it took five months. they don't have the futures market in the audited trail pro pfl. 15 years of regulation got us into this fragmented market. 15 years of things like regular ats, reagan-ms. the real market maker who had obligations to their customers when they were trading got lost. they left. they left the markets. there's no more economics in it

for them now. they've been replaced by the automated market who doesn't have customers. they trade proprietarily. >> long-term investors trove that phenomena as well without a doubt. they drove down costs so they couldn't make money and now they blame hfts. >> the brokerage firm dent on dell mallization. there's a desire to reduce trading costs, reduce the spread between the bid and ask and et cetera. they're driven it to the point where the brokerage firms are no longer profitable so they exit it. >> calling the markets a casino is that a big exfreem? >> it was up six points at one time today and down six points. it has logical movement. the high frequency traders, they

talk about the liquidity they create for the market. what's the quality of the liquidity of the market. it's flat at night and the morning. the holding period is a minute or two. >> it's seconds. >> some say it's ironic that a man who beat the house so to speak wants to change the business. >> to be honest with you, i'm going to benefit from all this stuff. i'm not going to be victimized, because i have a terrific team of 17 analysts work with me. we're calling on company directly and not relying on wall street research. to the extent that wall street research goes away and creates more inefficiencies, people that have the ability to do the research can can do better. sometimes i advocate things not in my self-interest. the system is broken. enough event vs taken place to suggest there's a problem, and when you talk to duncan, i believe he's say 730% of the new york stock exchange volume has nothing to do with fundamental investing. it's the high frequency traders and slicing and dicing of etfs.

we know the public has left the market. why? >> since the industry sdint self-police and less it fester for years, the europes are talking about banning things and stopping things. they're going to come in heavy-handed. the s.e.c. hasn't gone near there. you don't want to ban things. you do want to smartly attack the issue and get rid of the payment for order flow. >> wait, wait, wait. why wouldn't you ban it? you haven't given one reason why it should exist? >> mark, you can do things to make it go away. take the profit incentive away. it will disappear on its own. >> the key is how you respond when you recognize things didn't go the way you expected. now we got to respond, but just saying hft is there doesn't mean you should keep it. >> that's a very good observation. i'm just kind of a gradualist. i'm saying at a minimum there's a human cry from professional investors like myself that they made a mistake by taking out of

uptick rule. why don't they reinstate it for a trial period to see where the shenanigans go away and the market is more rational. the public doesn't understand the market. a large number of professionals don't understand the market. this is not good. we have to deal with it. >> i won't let you run without giving me a comment on the markets either. how do you see it right now? >> we've been very optimistic for two and a half years. i recognize two wildcards we have to think about. wildcard number one, the fed has created an environment where there is no effective alternative to common stocks. cash is zero, will be zero for a couple more years. u.s. government bonds are a joke basically in terms of where they sell. they're sub sid disidyized by t. the high yield is selling the tightest credit spreads and the lowest yields in multiple,

multiple years where stocks don't discount it. that's a wildcard plus, and the second thing is since 2008 institutions and individuals have largely risked their portfolios, so the pain trade for them is if the market goes up. those are the pluses. on the negative side i say the third quarter this year is going to be the first down quarter year over year in s&p profits since the third quarter of '09. i think the creators in washington will deal with the fiscal cliff, but until they do it it's an uncertainty. the tax regime is negative. we don't know how much it is going. valuations are in a zone of what i call fair, and we have election uncertainty. i'm looking for a change, but it doesn't look like the change i'm rooting for. >> your insights are always welcome on this program, mr. cooperman. thank you for coming up. >> thank you. >> joe, thank you for coming in. mark cuban will stick with us as

well. it's not just the individual investor getting hurt. how high-speed trading affects the institutions. we'll hear from the ceo of liquid net. halftime will be right back. ov. small in size. big on safety. greetings from the people here sure are friendly but some have had a hard time understanding my accent. so to make sure people get every word of the geico savings message i've been practicing how to talk like a true chicagoan. switching to geico could save you hundreds of dollars on car insurance... da bears. haha... you people sure do talk funny. geico®. fifteen minutes could save you fifteen percent or more on car insurance.

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as we wrap this up, let's look at realistic solutions, high frequency trading not likely to be banned any time soon what is the real answer? >> i think you have to go back to the foundation of the problem. won the exchanges went from nonprofit to profit, they did what all do tried to increase revenues and make their biggest customers happy. you can't mutt them back and make them nonprofitable. what you can do is regulate the order types and simplify the order types, tell them, look, whatever order types are available for algorithms, they have to be available in some man tear a broker to offer to the individual investor. just completely simplify, roll back all the different order types, don't let them introduce a new order type unless it is a value to the individual investor. wall street is supposed to be a platform for investing, not a platform to name hackers to come in and use it to their advantage

and that's exactly what's happening. >> mark, wither grateful for your time today, thanks so much for participating in what we hope was a thoughtful and substantive conversation on this really important topic for investors. >> thank you. i enjoyed it. all right, when we come back, final traced. we will hear from all the traders as we go around the horn. in the next hour, new york attorney general is suing jpmorgan for mortgage securities fraud. he joins us first on cnbc to outline his case. first, as i said, final trades next. se years at many different park service units across the united states. the only time i've ever had a break is when i was on maternity leave. i have retired from doing this one thing that i loved. now, i'm going to be able to have the time to explore something different. it's like another chapter.

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[ male announcer ] how do you turn an entrepreneur's dream... ♪ into a scooter that talks to the cloud? ♪ or turn 30-million artifacts... ♪ into a high-tech masterpiece? ♪ whatever your business challenge, dell has the technology and services to help you solve it. well come back. we hope this last hour has been as educational as we really hope it was informative as well. if you want more education on the topic, joe sal lose zi, sal around nah, check out their new book called "broken markets". final trades, speaking of the markets. josh brown, you first. >> if off long-term retire tonight plan for, don't worry about hft. buy the spider spy, hang on, let everyone else freak